Are We Seeing the Beginning of the End of the Big Tech Companies?

Facebook faces antitrust lawsuits in the USA, Google gets punished for breaking privacy law in France, and Facebook is accused of tracking citizens’ browsing behaviour at the EU – is this the start of the breakup of the Big Tech companies? Facebook has been served 2 major antitrust suits in the USA. The first is by the Federal Trade Commission (FTC) and the second is a joint case brought by 48 US States Attorney. Both revolve around Facebook’s acquisitions of Instagram (acquired by FB in 2012) and WhatsApp (acquired in 2014). Although at the time FB was given the go-ahead to buy the companies, many competition bodies have questioned the original decision by the US government. The 2 lawsuits allege that Facebook used a strategy of neutralizing competitors before they could threaten the company’s dominance of the social media market, and accuse FB of imposing “anticompetitive conditions” on software developers. Both cases seek a “divestiture of assets” for FB — that is, selling off Instagram and WhatsApp. Additionally, FB is likely to be required to get approval from the FTC before contemplating any mergers or acquisitions in the future. This is important in the light of the recent SA Competition Commission’s paper on “Competition in the Digital Economy”, which this Newsletter reported on in October. Any attempt by FB to hold on to WhatsApp or Instagram outside the USA is likely to be met with similar anti-trust action by the European Union, which has complained about the dominance of some of the “Big Tech” companies for many years, and by South Africa.

The French Data Protection Agency (the CNIL) has just fined Google 100 million Euros (about 1.9 billion Rands) for breaching the EU’s ePrivacy Directive rules.  CNIL found that whenever a user visited the French Google service, Google would place several advertising cookies on the user’s device without having first obtained the consent of the user. CNIL also found that when the user disabled “ad personalization” on Google Search, one of the advertising cookies still remained stored on the device and kept transmitting the information. In another case at the EU Court of Justice, the Belgian Data Protection Authority (DPA) has accused Facebook of the monitoring and recording the browsing behaviour of persons surfing the Internet from Belgium through the use of cookies and social plugins. This case is particularly interesting because it is the first at the EU Court of Justice to use what is called the “consistency mechanism”. This allows a national data protection authority to bring a case at the European level in order to ensure uniformity in supervision by the different data protection authorities throughout the EU. In other words if FB is found guilty by the EU Court it will have to stop its monitoring/recording of personal browsing behaviour throughout the EU, not just in Belgium.